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John Ameh, Abuja
The House of Representatives on Wednesday opposed fresh plans by the Federal Government to float a bond of N309bn to finance the power sector, which is already 60 per cent private sector-driven.
The Federal Ministry of Power/Works and Housing is said to have concluded plans to use the Nigeria Bulk Electricity Trading Company to raise the bond.
The House noted that the government’s decision was to use the bond to “cover the market shortfall made up of N187bn accrued in 2015 and N122bn projected shortfall for 2016.”
In a resolution following a motion moved by Mr. Edward Pwajok, the House expressed surprise that the government was securing another bond soon after the Central Bank of Nigeria provided an intervention fund of N213bn for the power sector.
“The House is also worried that in spite of that intervention, the shortfall, instead of being wiped out, has continued to escalate at the rate of about N15bn per month (equivalent to N500m daily), rising to a total -market shortfall ofN400bn as of December 31, 2015,” the resolution added.
Leading the debate, Pwajok told his colleagues that the idea of borrowing to fund shortfalls would discourage new investors from putting their money into the sector.
He argued further, “Market shortfall is a disincentive action for new investors to venture into the Nigerian electricity market, the implication being that the projected generating capacity expansion is an illusion since any increment in generating capacity would further escalate the market shortfall.
“Also concerned that the Discos, which collect revenues, fail to remit in full to other market participants, without any measures put in place by the Nigerian Electricity Regulatory Commission to block the leakages and there are no sanctions/penalties for defaulters.
“Disturbed that despite there has being no noticeable improvement in the electricity sector, either in the area of generation, transmission or distribution, tariffs have been increased twice since 2013.”
Lawmakers observed that the idea of using Nigeria’s collective wealth to fund the sector that only increased tariff but supplied low electricity was not their idea of a privatised power sector.
They added that the inefficiency in the sector, which privatisation was intended to address, had merely worsened in the past months.
For example, a member from Edo State, Mr. Johnson Agbonayinma, sought that the House should summon the Governor of the CBN, Mr. Godwin Emefiele, to explain how the initial N213bn intervention fund was disbursed.
“Nigerians cannot continue to suffer like this. No, Mr. Speaker, this is not acceptable.
“Everywhere you go in this country, what you encounter is inefficiency.
“Are we to continue to use public money to fund inefficiency? Agbonayinma added.
Another member, Mr. Kingsley Chinda, noted that all that the power sector had offered Nigerians was “higher tariff regimes.”
He said, “This was not what our people bargained for. There has to be value for the money they pay.”
The session, which was presided over by the Speaker, Mr. Yakubu Dogara, asked the ministry NBETC to “immediately halt the move to raise the bond.”
The House further directed its Committees on Power, Privatisation/ Commercialisation, Aids/Loan/Debts Management to “investigate the matter and report back to the House within six weeks.”
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